Tesla (TSLA) Reports Mixed Results, But Sees Strong Model X Demand

Posted by Tate Dwinnell | # |
10:50:27 am on February 16, 2012

Tesla Motors (TSLA) reported earnings last night that were mixed.  Quite frankly I couldn’t care about earnings with Tesla right now and I think most analysts would agree.  This is still a development stage company that has yet to test the “more mainstream” electric car market.  For now this is a company trading on potential and many have high hopes for both the Model S electric sedan expected to hit the streets in July as well as the Model X, which was unveiled last week and is expected to go on sale next year.  According to the company, demand is already strong for the Model X with 500 reservations in the first day.  Assuming an average price in the $75K range for the Model X, that equates to about one quarter’s worth of current revenues (close to $40 million) using current trends.  Not shabby at all.

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Let’s take a look at the quarter.  The company reported a bit wider loss than analysts expected at .69/share (vs the estimate for .63) on revenues that were a bit above what analysts were expecting ($39 million vs $37 million).

I’ll just highlight some key comments made by Tesla here…

– officially announced development program with Daimler for production of electric Mercedes-Benz using Tesla powertrain.  You might recall that Tesla announced a letter of intent for the deal during its last earnings report

– as mentioned above 500 reservations in first day for Model X

– fully assembling beta Model S vehicles completing 30 of about 50 they  plan to produce.  On track for July launch.  Release candidates expected to be produced soon.

– added over 1500 new Model S reservations during the quarter, bringing total to 8000

– added three new design stores in Bellevue, WA, Chicago, IL and Newport Beach, CA,
and a Tesla Gallery in Houston, TX.  Expects to open 8-10 new stores and 10 -15 service centers this year.

– Model X production to begin late next year and ramping up in early 2012

– Daimler recently issued Tesla an initial purchase order to develop a full powertrain for a new, all-electric Mercedes-Benz.  Will start recognizing revenue from this deal in Q2.

– The Toyota RAV4 EV program continues on schedule with plans to ship complete powertrain systems under the production contract starting in Q2

– Tesla is providing revenue guidance of between $550 – $600 million with most of that coming in the 2nd half of the year following the Model S release.  That’s ahead of the analyst estimate for $520 million in revenue.   For 2013, analysts expect Tesla to finally start socking away some big profits with revenues of $1.6 billion.

Technically, I stand by my prediction from my last article that Tesla will soon retest the highs around $35 – $36 and likely break through before the year is out in anticipation of the Model S and Model X releases.

Disclaimer: I currently have no position in Tesla.

 

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